Accounting 1, Exam 2

There would be 100,000 shares of common stock outstanding when the number authorized was 150,000 issued shares totaled 120,000, and 20,000 shares were being held as treasury stock.

• True

• False

When a company acquires treasury stock, assets and stockholders' equity both decrease

• True
• False

Total stockholders' equity of Grasse Company is not affected when a stockholder sells shares of Grasse Company stock to another stockholder

• True
• False

The issue of $5 par value common stock for $18 per share results in $18 credit to the common stock account for each share issued.

• True
• False

Shares of stock held as treasury stock do not have voting rights or the right to receive dividends.

• True
• False

A stock split results in the reduction of the par or stated value per share and proportionate increase in the number of shares outstanding.

• True
• False

Common stockholders have the authority to declare cash dividends

• True
• False

The issuing company and the trustee determine the selling price of a bond.

• True
• False

Amortization of a discount on a bond payable will result in an increase in the net book value of the bond liability on the balance sheet.

• True
• False

A bond's cash interest payments per period are determined by multiplying the bond's face value by the coupon rate, divided by the number of payments per year.

• True
• False